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@moth
Nearly. You're out by a factor of pi. What you're describing is development. Gear inches traditionally refers to the diameter of the equivalent penny farthing wheel. Development = the circumference of the equivalent wheel, i.e. pi x diameter.
Gear inches are really just an almost arbitrary scale that gives comfortable size numbers for people to talk about (increments small enough that you don't loose much by rounding to the nearest number, but large enough that you don't need many digits).
I think the middle gear of a P5 hub is direct drive - i'd aim to make that the gear i use most for cruising along, as it should give least friction and least wear on the hub. The choice of 60.9 looks good to me. I think the high friction gears will be 2 and 4 as they impose skew forces on the compound planet gears.